SEC Charges Father-Son Investment Adviser Team in Florida For Role in Massive Hedge Fund Fraud

Washington, D.C., Jan. 11, 2010 — The Securities and Exchange Commission today charged two Sarasota, Fla.-based investment advisers with securities

Washington, D.C., Jan. 11, 2010 — The Securities and Exchange Commission today charged two Sarasota, Fla.-based investment advisers with securities fraud for misleading investors about the financial condition of three hedge funds they managed, and misrepresenting that they controlled the funds’ investment and trading activities when in fact they were being handled by Arthur G. Nadel.

The SEC alleges that Neil V. Moody and his son, Christopher D. Moody, distributed offering materials, account statements, and newsletters to investors that misrepresented the hedge funds’ historical investment returns and overstated their asset values by as much as $160 million. The Moodys based their materials on grossly overstated performance numbers that Nadel created and provided to them. The Moodys failed to independently verify the accuracy of the figures despite multiple red flags, and relied exclusively on Nadel’s inaccurate information when communicating with investors.

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The SEC charged Nadel with fraud last year and obtained an emergency court order to freeze his assets.

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Read the SEC complaint here.

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